A civilization can go from reason to barbarism faster than you think…
History doesn’t repeat, but it does rhyme…
Dear Reader,
Yesterday I contrasted the American Revolution with the French Revolution.
I argued that the American Revolution was “a revolution not made but prevented.”
The French Revolution, meantime, represented civilizational suicide… and lunacy on the wholesale.
How did Enlightenment France descend into the pits of psychological delirium?
And can it happen to us — or something close to it?
Today we take up the questions.
There Will Never Be a Revolution Here
Mr. Bill Bonner of Bonner Private Research:
By the 18th century, France had become the greatest power in Europe, the richest and most populous country in the Western world and the clear leader in art, science, philosophy, education, cuisine, fashion, architecture…and, of course, viticulture. It had the richest people in the world, the prettiest women and the best booze.
It also had the most enlightened economists – the physiocrats – from whom Adam Smith was boosting some of his best ideas.
A poll taken in the early 1780s might have shown the French to be extremely optimistic and confident. And why shouldn’t they be? The last major financial crisis – caused by John Law’s Mississippi Bubble – blew up over 60 years before. And had the world ever seen anything approaching the splendor of Versailles?
Then came 1789 and its revolutionary deliriums:
But in 1789, Paris mobs came to the crossroads of history and veered left. They replaced an absolute monarch who had very limited power with a people’s republic restrained neither by common sense nor common decency.
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Revolutionary Sparks
What spark — or which sparks — set the revolutionary fires arage?
First, there was the estates system; a feudal hierarchy, a social pyramid. At the pinnacle was the First Estate — the church and its officiating clergy.
Wedged in the middle, in the Second Estate, was the nobility.
Below the nobility squatted the remaining 98% of France, the massive base of the pyramid — the Third Estate — merchants, tradesmen, lawyers, peasants, et cetera.
The government squeezed the majority of its tax revenues from this Third Estate. That is, the lower 98% hauled the bulk of the freight.
The 98% kept the 2% bouncing along in a sort of opulence. Naturally… the 98% bristled and bridled under the burden.
But they had been accustomed to the business for generations. Why finally raise a mighty rumpus in 1789?
The Hungry Times
An army marches on its stomach, it is said. A people too marches on its stomach.
And in the 1780s, the people of France were falling out of formation.
France was the most populous nation in Europe. It thus required the most foodstuffs.
A fantastic volcanic eruption in 1783 — in present Iceland — threw out so much soot it reduced the sun to a candle.
Winter was grim. And the 1784 harvest yielded lean, lean pickings. The following summers witnessed drought, slim harvests… and famine.
1787 and 1788 brought more hungry times. With them, inflation.
That is because slender harvests raised the price of flour — hence, the price of bread.
And a shrinking belly… twinned with a shrinking currency… equals an expanding crisis.
It means a heart filling with resentment and a head filling with ideas.
It meant — in this instance — revolution.
The Alan Greenspan of the 18th Century
I have neglected the crucial role of a critical actor… “the Alan Greenspan of the 18th century” — Monsieur Jacques Necker — to whom we now turn.
As Mr. Bonner explains:
None of this might have happened, however, except for the efforts of the Alan Greenspan of the late 18th century — Jacques Necker. It was Necker who [eventually] replaced laissez-faire economist Jacques Turgot as French finance minister in 1776.
Turgot’s free-trade policies had the fatal flaw of all sensible rules – they benefited everybody to the advantage of nobody in particular. Turgot dissolved the guild system, eliminated the corvee (the forced labor of the peasants), imposed a simple property tax and opposed all forms of economic privilege at the expense of the common good.
He even set himself against Marie Antoinette, by refusing to grant favors to her cronies. Since everybody in France in the 18th century as well as every American in the 21st wanted the privilege of picking someone else’s pocket, Turgot eventually made enemies of nearly every class. Louis XVI, though responsible for the well-being of the entire nation, had not the strength to stand up to the special interests.
More:
Turgot even had a prophetic intuition and a view of history similar to our own. Periods of civilized progress are followed, he noted, by periods of barbarism and madness…
Necker… favored particular privileges at the expense of everybody else. Rather than tax people to pay for state expenses, Necker borrowed — taking short-term, high-interest loans that brought the government close to bankruptcy. Then, Necker turned to accounting tricks to show that the government was actually running a surplus! The patsies loved it.
Pushed out for the first time in 1781, Necker was called back on the eve of revolution in 1788 for another dose of his financial magic. But it was too late. The old miracle elixirs — heavier debt and cooked books — wouldn’t work any longer; bankruptcy was unavoidable. The aristocrats got rid of him again — on July 14, 1789. The mob, which still had faith, was so disappointed… it headed for the Bastille.
History Doesn’t Repeat, But It Rhymes
History does not repeat. Yet it does rhyme, as said the great scalawag Mark Twain.
Will Americans head one day for their own Bastille?
2025 America is not 1789 France. The Church is punchless, American nobility is a contradiction in terms, no king hangrides and beleaguers us.
Yet millions of Americans believe they are being bossed and exploited by an overbearing elite.
Many of the president’s most loyal partisans are cross with him over his treatment of the Epstein affair.
They fear he is shielding powerful elites from scrutiny.
Meantime, many Americans believe they are languishing at the base of the economic pyramid… while the pyramid’s tip lives grandly — almost royally.
They believe the Federal Reserve chairman, whomever it may be, is a modern Jacques Necker.
Nah, It Could Never Happen Here, Right?
Are Americans ready for a man upon a white horse? I do not know.
Yet many believe, correctly or incorrectly, that that man is already on station.
He is a man with orange hair.
Here is another possible historical rhyme: As in 1789 France, inflation is loose.
Today’s inflation does not approach the French inflation. Yet it does persist.
Add together a frustrated population sat upon by elites… many wallowing economically… and history’s rhyme might just become an awful clang.
Do I predict it? No, I do not. I merely suggest a possibility. It is a highly unlikely possibility at that.
Yet so seemed the French Revolution in 1780.
Brian Maher
for Freedom Financial News
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